Shutdown of ABS-CBN broadcasting

Under Philippine law, broadcasting networks requires a congressional franchise (Republic Act) to operate television and radio stations for 25 years; absence of one will lead to suspension of such operations. ABS-CBN's current franchise, which was approved by virtue of Republic Act No. 7966 (granted last March 30, 1995), is set to expire on March 30, 2020, however it will expire on May 4, 2020, because the franchise will effective to 15 days after granting the franchise.[6] At least 12 lawmakers has filed their own versions for a new franchise of the network. House Speaker Alan Peter Cayetano has made assurance that the Congress will tackle the franchise with fairness.^[7]

On February 24, 2020, the CEO of the network apologized to President Rodrigo Duterte for not airing his political advertisements during his 2016 polls, and the Congress finally made its decision to tackle their franchise renewal.^[8]

During a Senate Hearing on the same day, public services panel chair Grace Poe stated they were to tackle ABS-CBN's compliance with the terms and conditions of its franchise. The conclusion was that there was no breach of laws or franchise terms. The following is a summary of the findings:

1. The
   Bureau of Internal Revenue stated that ABS-CBN had fully complied with the tax requirements of the government. Sir Cabantac Jr., BIR Large Taxpayers Service head stated that the company had paid P14.298 billion from 2016 to 2019. In 2019, ABS-CBN also setteled P152.44 million in tax payments with the BIR.^[9]
2. The Department of Labor and Employment cleared the media giant for its compliance with general labor standards, occupational safety and health, and security of tenure. Former ABS-CBN corporate services head Mark Nepomuceno said they also have contributed to mandatory employee benefits such as SSS, Phil-Health, PAG-IBIG. He also stated that ABS-CBN was no longer practicing end-of-contract scheme, as well as giving benefits to independent contributors varying per contract negotiation^[9]
3. Telecommunications Commissioner General Gamaliel Cordoba stated that franchise laws cover “commercial purposes”, including pay-per-view service. Section 1 of Republic Act 7908, which allows ABS-CBN Covergence’s broadcast operations, states that: “It is hereby granted a franchise to construct, operate, and maintain, for commercial purposes.” Even though ABS-CBN introduced the service without NTC guidelines yet, the fine for such violation is a measly P200. Senate President Recto stated that the NTC can just impose a fine on ABS-CBN rather than shutdown.^[9]
4. Securities and Exchange Commission Commissioner Ephyro Amatong clarified that a legal interpretation from 1999 stated that Philippine Depository Receipts were not equivalent to certificates of ownership, which may have evolved in recent years. Senator Poe pointed out that companies should be notified of any changes in the legal interpretation of the investment instrument, as all media companies have to be 100% Filipino-owned. Issuing PDRs is a common practice among Philippine media outfits—including Rappler and GMA. The SEC has not yet conducted a review whether there are violations in ABS-CBN’s PDRs, with Amatong saying he "would rather not make a categorical statement at this time" as to whether there are violations in ABS-CBN’s PDRs, given the pending case at the Supreme Court, as of May 6, 2020.^[9]

On May 5, 2020, the

The network subsequently signed off following the airing of news program TV Patrol. ABS-CBN was also given 10 days for its explanation on why its assigned frequencies should not be recalled.^[13]